EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0507073
Customs Act 1901
Background
Part XVA of the Customs Act 1901 (the Act) sets out a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (the CEO). A lower rate of customs duty applies to goods that are the subject of a TCO.
Under section 269F of the Act, a person may apply to the CEO for a TCO in respect of goods. If the CEO is satisfied that the application is not in respect of goods specified in section 269SJ of the Act, which sets out those goods that cannot be subject to a TCO, the CEO must decide whether the application meets the core criteria.
Section 269C of the Act provides that a TCO application meets the core criteria if, on the day on which the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269B of the Act provides that ‘goods produced in Australia’ has the meaning given by section 269D, ‘ordinary course of business’ has the meaning given by section 269E and ‘substitutable goods’ in respect of goods the subject of a TCO application, means goods produced in Australia that are put, or are capable of being put, to a use that corresponds with a use (including a design use) to which the goods the subject of the application can be put.
Subsection 269P(3) of the Act provides that if the CEO is satisfied that a TCO application meets the core criteria, the CEO must make a written order (a TCO) declaring that the goods the subject of the TCO application are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff) specified in the order applies.
Standard Knitting Mills Pty Ltd applied for a TCO in respect of certain Nylon Yarn on 8 June 2005.
Instrument
TCO No 0507073 was made on 2 September 2005. It declares that those certain Electrostatic Dusters are goods to which item 50 of Schedule 4 to the Tariff applies since the CEO was satisfied that no substitutable goods were produced in Australia. The general rate of duty on these goods is 5%. The rate of duty for the goods subject to the TCO is 0%.
Consultation
Subsection 269K(1) of the Act provides in part that as soon as practicable after accepting a TCO application as a valid application, the CEO must publish a notice in the Gazette which includes an invitation to any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO. The CEO did not receive any submissions in response to this invitation.
Commencement
Subsection 269S(1) relevantly provides that a TCO is to be taken to have come into force on the day on which the application for the TCO was lodged. TCO No. 0507073 is taken to have come into force on 8 June 2005.
The TCO does not affect the rights of a person (other than the Commonwealth) as at the date of registration so as to disadvantage that person or impose liabilities on a person (other than the Commonwealth) in respect of anything done or omitted to be done before the date of registration. The rights of importers will be beneficially affected. Under paragraph 126(1)(r) of the Regulations, importers of such goods will be able to apply for a refund of duty on goods imported since the day on which the TCO is taken to have come into force. The TCO does not impose any liabilities on any person.
Overview
The Customs Act 1901, enacted by the Australian Parliament, establishes a framework within which Tariff Concession Orders (TCOs) may be issued by the Chief Executive Officer of Customs. This legislation was introduced to address the need for reduced customs duties on specific goods that meet certain criteria, thereby promoting economic efficiency and competitiveness in the Australian market. The explanatory statement for Tariff Concession Instrument No. 0507073, enacted on 2 September 2005, exemplifies the application of this framework. In this instance, the instrument was made in response to an application by Standard Knitting Mills Pty Ltd for a TCO on certain Nylon Yarn. The policy objective of this particular TCO was to ensure that the goods in question, which are Electrostatic Dusters, are subject to a lower rate of customs duty by applying item 50 of Schedule 4 to the Customs Tariff Act 1995, effectively reducing the duty from 5% to 0%. This reduction was implemented based on the CEO's determination that no substitutable goods were produced in Australia at the time the application was lodged.
Scope and Application
The Tariff Concession Instrument No. 0507073, pursuant to the Customs Act 1901, applies to any entity that seeks a tariff concession order (TCO) for specific goods, provided that the goods in question are not listed in section 269SJ of the Act as ineligible for TCOs. This legislative instrument targets entities engaged in the importation of goods that meet the criteria for tariff concessions, allowing for a lower rate of customs duty than would otherwise apply. The geographic reach of the Act is national, as it pertains to the Commonwealth of Australia and its customs regulations. The Act allows for the CEO of Customs to extend or restrict its application through subordinate instruments, such as the Tariff Concession Orders, to further specify the terms and conditions under which tariff concessions are granted. Importantly, the Act does not disadvantage any person by affecting their rights as at the date of registration and does not impose liabilities on any person except the Commonwealth.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0507073 under the Customs Act 1901 (section 269C) establish the criteria for the Chief Executive Officer of Customs (CEO) to grant a Tariff Concession Order (TCO). If the CEO is satisfied that an application for a TCO meets the core criteria, which include ensuring that no substitutable goods are produced in Australia on the date of the application, the CEO must issue a written order (section 269P(3)). This order declares that the specified goods will have a lower rate of customs duty applied to them. For example, in this case, certain Electrostatic Dusters will have a duty rate of 0% instead of the general 5% (section 269P(3)).
The obligations imposed by the Act on the parties it governs include the requirement for applicants to ensure that their applications for a TCO are made in accordance with the specified criteria. The CEO, in turn, has the obligation to assess the application, publish a notice in the Gazette inviting any objections (subsection 269K(1)), and make a decision based on the information provided. The CEO must also ensure that any TCO made does not affect the rights of any person adversely and does not impose any new liabilities (subsection 269S(1)).
There are no specific offences mentioned in the explanatory statement; however, the failure to comply with the provisions of the Customs Act 1901 or the regulations could lead to civil or criminal consequences. These may include fines or penalties as stipulated by the relevant laws. The maximum penalties for breaches of customs regulations can vary but are typically set out in the relevant legislation. For instance, under the Customs Act 1901, penalties for non-compliance can include fines of up to 10,000 penalty units or imprisonment for up to five years, or both, for serious offences. It is important to note that the actual penalties will depend on the specific nature and severity of the breach.